The trade deficit narrowed significantly in July, falling from $49.8 billion in June to $42.8 billion in July.
Exports of goods and services increased to $153.3 billion in July from $150.6 billion in June, while imports fell to $196.1 billion in July from $200.3 billion the prior month.
The good news is that the improvement came from higher exports of capital goods ($2.3 billion), other goods ($0.5 billion) and industrial supplies and materials ($0.5 billion).
Imports declined, reflecting a drop in consumer goods ($1.9 billion), automotive vehicles, parts, and engines ($0.7 billion) capital goods ($0.6
billion).
Taking a look at the last couple of months it appears that the data were affected by unexpected swings (difficulties in seasonal adjustments?) in both imports and exports, which tended to cancel each other out in July.
Looking at the chart above, the trend toward an expanding trade deficit remains intact, as rising exports – aided by an expanding global economy – are more than offset by modest gains in consumer demand and higher oil prices.
For the first seven months of the year, oil imports have totaled $148.7 billion, up by $52.5 billion versus the same period one year ago, according to data provided by the Commerce Department.
Blame the rise in oil prices for much of the deterioration in the country’s trade gap over the past twelve months.
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